THE GOVERNMENT is considering alternative sources of energy in the event of a “worst-case scenario” for Middle East suppliers, Energy Secretary Sharon S. Garin said.
“Marami tayong pwedeng pagkukunan (There are many sources we can draw from). 20% lang ang dumadaan sa Strait of Hormuz (only 20% of the world’s energy transits the Strait of Hormuz,)” she said, referring to the narrows that restrict access to the Persian Gulf, which is at risk of being blocked by military action in the area.
“There are many countries that are producing oil and are willing to sell oil also to the Philippines,” Ms. Garin said at a briefing on Tuesday.
Reuters reported on Monday that Iran will fire on any ship trying to pass the Strait.
Users of the Strait include Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran.
Ms. Garin said 98% of Philippine crude imports comes from the Middle East. The remaining 2% is sourced from Brunei and Malaysia.
“Looking globally, significant shifts in global conditions may therefore be reflected in broader market prices,” she said.
Rino E. Abad, director of the Department of Energy (DoE)-Oil Industry Management Bureau, said alternative suppliers not affected by disruptions to the Persian Gulf include the US, Canada, South America, and Africa.
“’Yun ang importante na pina-prioritize ng department ay ’yung masigurado ’yung continuous supply ng fuel at ’yung mga big-time price increases ay hindi ma-implement on a one-time basis. (The department’s priorities are to ensure continuous supply of fuel and to ensure that severe prices increases do not take effect in one blow).” The combination of these measures will actually mitigate the impact on consumers,” he said.
Ms. Garin said oil companies have sufficient inventory to meet fuel demand.
“We would like to assure the Filipino households, motorists and businesses that the country’s fuel supply remains sufficient and stable,” Ms. Garin said.
Oil companies are required to maintain at least a 30-day inventory of crude oil and a 15-day inventory of finished petroleum products.
Ms. Garin said that ordering takes about a week, noting that maintaining an inventory of a year will be expensive and require more storage.
“We are instructing all oil companies to submit to us this week, by tomorrow, if possible, all the contingency measures that they are currently taking as a situation as is today or if it prolongs or escalates,” Ms. Garin said.
She also directed the Philippine National Oil Co. to pursue alternative sources in the event that oil companies require assistance.
Energy Undersecretary Alessandro O. Sales said the supply is less of a concern than price.
“There will be petroleum products that can be bought. The main risk… is how high the price will go. And therefore, (the DoE is focusing on) how to mitigate the price impact,” he said, adding that the possible suspension of the excise tax on petroleum products is on the table.
President Ferdinand R. Marcos, Jr. said in a Palace briefing earlier on Tuesday that he is considering seeking congressional authority to temporarily reduce excise taxes on petroleum products should global oil prices surge further.
The Tax Reform for Acceleration and Inclusion law imposed excise taxes hikes on petroleum products in three tranches between Jan. 1, 2018 and Jan. 1, 2020.
The biggest excise tax increases were applied to diesel, liquefied petroleum gas and bunker, with rates rising from P2.50 to P6 per liter.
“We are willing to give assistance in whatever form is needed,” Ms. Garin said.
On Monday, oil firms announced an increase in gasoline prices by P1.90 per liter, diesel by P1.20 per liter, and kerosene by P1.50 per liter.
The upward adjustments marked the 10th consecutive week of increases for diesel and kerosene, and eight straight weeks for gasoline. Since January, per-liter prices of gasoline, diesel, and kerosene have risen by P6.70, P9.40, and P7.70, respectively.
Ms. Garin said the government is looking to encourage oil companies to implement a staggered approach should there be a major price movement next week. — Sheldeen Joy Talavera
